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Assignment onGoogle: An Internet Search Service Company
Submitted to:M NAZMUL AHSAN KHAN
Faculty of Business American International University Bangladesh Course: Strategic Management
American International University BangladeshDate: 28 MARCH, 2011
Section: B, Program: MBA
Google Inc.: The Company2
Google was founded in 1998 by Larry Page and Sergey Brin, PhD students at Stanford University who were fed up with the existing Internet search technology companies and their inability to return accurate search results. Google was basically an online company that specialized in developing a reliable Internet search engine. Google Inc. became a global technology leader focused on improving the ways people connect with information. Their innovations in web search and advertising have made their web site a top internet property and the brand one of the most recognized in the world. Google maintains a large index of web sites and other online content, which is freely available via their search engine to anyone with an internet connection. Googles Strategic Position: Google understands the wealth in diversification. Exploring new opportunities constantly over a solid base of research could prove profitable with the use of products that can reduce cost cost of production, advertisements, etc. These new products are crucial in gaining leverage in the constantly changing market and providing an alternative industry if need be. Google understands that valuable profits and minimized risk can be garnered with international operations. Googles Vision & Mission: Googles mission is To organize the worlds information and make it universally accessible and useful. Googles vision is To develop a perfect search engine. They believe that the most effective, and ultimately the most profitable, way to accomplish the mission is to put the needs of the users first. Offering high-quality user experience leads to increased traffic and strong word-of-mouth promotion. Googles dedication to putting users first is reflected in three key commitments: Doing the best to provide the most relevant and useful search results possible, independent of financial incentives. The search results will be objective, and we do not accept payment for search result ranking or inclusion. Doing the best to provide the most relevant and useful advertising. Advertisements should not be an annoying interruption. If any element on a search result page is influenced by payment, it will be made clear to the users.3
Will never stop working to improve user experience, search technology, and other important areas of information organization. Believe that user focus is the foundation of success to date and this focus is critical for the creation of long-term value and not intend to compromise user focus for short-term economic gain.
Googles Objectives: Googles objective is to provide the users the perfect search engine that would understand exactly what they mean and give back exactly what they want. Now a days Google became successful precisely because of better and faster at finding the right answer than other search engines at the time. As Google keeps looking towards the future, these core principles guide its actions. 1. Focus on the user and all else will follow. 2. Its best to do one thing really, really well. 3. Fast is better than slow. 4. Democracy on the web works. 5. You dont need to be at your desk to need an answer. 6. You can make money without doing evil. 7. Theres always more information out there. 8. The need for information crosses all borders. 9. You can be serious without a suit. 10. Great just isnt good enough. These principles were written several years ago, still now it is revisited to see if the principles are well maintained through Googles journey or not.
Corporate Governance Co-founders Larry Page, president of products, and Sergey Brin, president of technology, brought Google to life in September 1998. Since then, the company has grown to more than4
20,000 employees worldwide, with a management team that represents some of the most experienced technical professionals in the industry. Eric Schmidt joined Google as chairman and chief executive officer in 2001. Board of Directors: Eric Schmidt, Google Inc. Sergey Brin, Google Inc. Larry Page, Google Inc. L. John Doerr, Kleiner Perkins Caufield & Byers John L. Hennessy, Stanford University Ann Mather Paul S. Otellini, Intel K. Ram Shriram, Sherpalo Shirley M. Tilghman, Princeton University
Top Management: Eric Schmidt, Chairman of the Board and Chief Executive Officer Sergey Brin, Co-Founder and President, Technology Larry Page, Co-Founder and President, Products Nikesh Arora, President, Global Sales Operations and Business Development Shona L. Brown, Senior Vice President, Business Operations David C. Drummond, Senior Vice President, Corporate Development and Chief Legal Officer Alan Eustace, Senior Vice President, Engineering and Research
Patrick Pichette, Senior Vice President and Chief Financial Officer Jonathan Rosenberg, Senior Vice President, Product Management
Societal Environment Google is well positioned in demographics because it has a relatively young user base. This is a good side as the use of internet increases the use of search engines also increase. Internet search doesnt depend on factors like gender, religion etc. therefore Google has an advantage over other businesses. a. Economy IT related companies like Google are relatively isolated because search and consequently internet-based advertisements has become a staple to the world society and economy. Googles focus on highly targeted, measurable advertising makes it more recession-proof than many other businesses in the technical sector. The crucial need to stay informed and constantly connected keeps such services vibrant despite the parched surroundings. b. Technology Technology is obviously always improving and Google has taken specific measures to make sure it does not fall behind. Google can use commodity computer parts (cheap components) knowing they will fail by ensuring that every component always has a duplicate. The components are attached to the computer with Velcro rather than screws which allows for quick swapping and upgrading. c. Socio-Cultural The world is increasingly becoming more connected due to the means of communication available through the internet. And, for many people, the search giants like Google make the internet navigable. As internet use increases among all age groups and across all cultures, we will become increasingly more dependent on internet search.6
Task Environment: Porters 6 forces (Forces Driving Industry Competition) Porters 6 Forces analysis is a framework for industry analysis and business strategy development relative to the competitors of a firm. Threat of New Entrants The barriers to entry in the internet search market are high. There are many competitors in different industries, including traditional search engines, vertical search engines and e-commerce sites, social networking sites, traditional media companies, and providers of online products and services. Googles current and potential competitors range from large and established companies to emerging start-ups. The market now, however, is more mature with a necessary path dependency to gather data on both the content of web pages and the search history of users. Therefore, the threat of new entrants in the internet search market is relatively low.
Rivalry among Existing Firms Googles main competitors are Yahoo, AOL and MSN. Presently, Google has nearly 60% of US market against their search engine. This large market share helps them to improve the quality of their search results and get ads more quickly than their competitors. The competitive rivalry is strong and ongoing in this industry because large amounts of advertising dollars flow to the website that has captured the largest volume of searches.
Threat of Substitute Products In 2008, the internet has become the most chosen by millions of people all over the world to request and retrieve information. Information can be organized in different ways including7
categories and sorted by date, but Google provides tools to complete these tasks as well as conduct searches. A substitute product may be invented in the future, but there are no obvious substitutes to organizing information on the internet.
Bargaining Power of buyers The customers of Google are mainly the ad providers. Ad providers are continuously looking for the search engines which the people use the most to attract the target customers. In this case Google is number one as the usage of this search engine is the most depending on its fast and reliable search results and simplicity of the website. Brand value is also a reason for Google current success. The users play a vital role for Googles revenue as the popularity of search engine depends on it.
Bargaining Power of Suppliers Googles ad system is a reliable source of income because both the ad-making partner and adreceiving individual are both customers of Googles. So as long as Google maintains its market dominance with the search product, supplier bargaining power will remain low.
Relative-power of Stake-holders In Googles case the main power is on the hand of the investors and other partners. As Google is a public company its financial stability is very important for the investors. The increase in stock price proves that the company has a very good reputation and the financial condition is sound. The companys expenses are minimal because it had no inventory. But any kind of rules and regulations in the search industry might affect the company as it may affect the world.